Rich Daly, HFMA senior writer/editor

The SNF value-based payment shift has raised some concerns about micromanagement of providers and reductions in the number of providers.

Aug. 1—Post-acute care providers will see more than a $1 billion pay boost for FY19—along with a range of policy changes—as described in annual final rules issued by Medicare this week.

The largest pay bump—$820 million, or a 2.4 percent increase—will go to skilled nursing facilities (SNFs) in FY19, according a July 31
final rule from the Centers for Medicare & Medicaid Services (CMS). That more than doubled the FY18 increase of $370 million, or 1 percent.

Another
final payment rule issued this week increased hospice payments by $340 million, or 1.8 percent, in FY19.

Inpatient rehabilitation facilities (IRFs) will garner a $105 million, or 1.3 percent, increase for FY19, according to their
final rule. Inpatient psychiatric facilities (IPFs) will have a $50 million, or 1.1 percent, increase, according to another
final rule.

New Model

Beginning Oct. 1, 2019, Medicare payments to SNFs will be determined by a new case-mix model as part of various policy changes included in the recently issued final rules.

The Patient-Driven Payment Model (PDPM) focuses on the patient’s condition and resulting care needs to determine Medicare payment, rather than on the amount of care provided. The PDPM includes adjustments to SNFs’ per diem payments that reflect varying costs throughout the stay, while
incorporating certain “safeguards” to keep from incentivizing unwanted care.

“The new model is designed to improve the incentives to treat the needs of the whole patient, instead of focusing on the volume of services the patient receives, which requires substantial paperwork to track over time,” a
CMS fact sheet stated.

However, the finalized PDPM drew early criticism from one provider advocate.

“The tone of the rule itself and many of the specific comments related to therapy and the new payment model are cause for concern,” said Mark Parkinson, president and CEO at the American Health Care Association (AHCA), which represents 13,600 post-acute providers. In 2016, about 15,000
SNFs provided 2.3 million Medicare-covered stays to 1.6 million fee-for-service (FFS) beneficiaries, according to a March 2018
report from the Medicare Payment Advisory Commission (MedPAC).

Among Parkinson’s specific concerns was that the rule limits concurrent and group therapy to 25 percent of the patient’s total therapy time.

“Decisions about how much therapy is provided should not be made from a government office,” Parkinson said in a written statement. “Clinicians and patients should make those decisions together.”

The limit on group and concurrent therapy may impact SNF workflows and how facilities provide the therapy, said Clay Richards, president and CEO of naviHealth.

“As far as from a care management and care coordination standpoint, it’s not significant at all,” Richards said in an interview, referring to the new SNF payment model. “And it really wouldn’t change our expectations for [improved] quality outcomes.”

PDPM was meant as a simplified version of a replacement payment model for SNFs that CMS originally proposed in May 2017, known as the Resident Classification System, Version I. The new model aimed to shift Medicare payments away from volume and to incentivize providers to deemphasize therapy
hours in favor of group sessions and general quality improvements.

Another concern with the new model was that the value-based requirements could decrease SNF capacity in markets where the facilities already are in short supply, such as in much of California, said Barbara Skier RN, JD, an attorney for Stephenson, Acquisto, and Colman who focuses on hospital
payment issues.

“Yes, I want the quality but we also have to address the lack of ability to place” patients discharged from hospitals, Skier said in an interview.

MedPAC, which concluded that Medicare SNF payments nationally were “adequate,” also concluded that because it found 970 SNFs that provided relatively high-quality care at relatively low costs, “opportunities remain for other SNFs to achieve greater efficiencies.” MedPAC recommended no SNF pay
increase for either 2019 or 2020, based in part on its finding that those facilities’ marginal profit, a measure of the relative attractiveness of treating Medicare beneficiaries, was at least 19.6 percent.

“At the end of the day, providers are going to be successful based on quality outcomes and how we can evolve to—not fully away from FFS but moving toward—where providers are rewarded for producing value and better clinical outcomes,” Richards said. “I would expect that would make SNF
providers, in particular, continue to maintain that focus, recognizing there will be an adjustment in moving away from a therapy-based system to one based on clinical complexity.”

Addressing the Administrative
Burden

The PDPM approach aims to reduce paperwork compliance costs related to patient assessments by an estimated $2 billion over 10 years, CMS stated.

Additionally, CMS will remove two measures from the IRF Quality Reporting Program. Those providers can stop reporting data for the NHSN MRSA and seasonal flu vaccination measures after Oct. 1.

CMS originally proposed removing eight measures from the IPF Quality Reporting Program but ended up removing only five. It retained three measures after public comments underscored their importance.

Starting Oct. 1, 2018, the SNF value-based purchasing (VBP) program will produce payment cuts or bonuses for SNFs based on readmissions-measure performance.

“The single claims-based all cause 30-day hospital readmissions measure in the SNF VBP aims to improve individual outcomes through rewarding providers that take steps to limit the readmission of their patients to a hospital,” the CMS fact sheet noted. However, CMS will assess VBP
performance based on existing Medicare claims information instead of requiring additional reporting.

The final rule included changes in the scoring methodology for low-volume SNFs and an extraordinary-circumstances exemption policy. CMS estimated the updates will cut aggregate VBP payments by $211 million.

Another SNF change will increase from one year to two years the data collection period for calculating two measures on the Nursing Home Compare website.

The SNF value-based payment shift has raised some concerns about micromanagement of providers and reductions in the number of providers.

Aug. 1—Post-acute care providers will see more than a $1 billion pay boost for FY19—along with a range of policy changes—as described in annual final rules issued by Medicare this week.

The largest pay bump—$820 million, or a 2.4 percent increase—will go to skilled nursing facilities (SNFs) in FY19, according a July 31
final rule from the Centers for Medicare & Medicaid Services (CMS). That more than doubled the FY18 increase of $370 million, or 1 percent.

Another
final payment rule issued this week increased hospice payments by $340 million, or 1.8 percent, in FY19.

Inpatient rehabilitation facilities (IRFs) will garner a $105 million, or 1.3 percent, increase for FY19, according to their
final rule. Inpatient psychiatric facilities (IPFs) will have a $50 million, or 1.1 percent, increase, according to another
final rule.

New Model

Beginning Oct. 1, 2019, Medicare payments to SNFs will be determined by a new case-mix model as part of various policy changes included in the recently issued final rules.

The Patient-Driven Payment Model (PDPM) focuses on the patient’s condition and resulting care needs to determine Medicare payment, rather than on the amount of care provided. The PDPM includes adjustments to SNFs’ per diem payments that reflect varying costs throughout the stay, while
incorporating certain “safeguards” to keep from incentivizing unwanted care.

“The new model is designed to improve the incentives to treat the needs of the whole patient, instead of focusing on the volume of services the patient receives, which requires substantial paperwork to track over time,” a
CMS fact sheet stated.

However, the finalized PDPM drew early criticism from one provider advocate.

“The tone of the rule itself and many of the specific comments related to therapy and the new payment model are cause for concern,” said Mark Parkinson, president and CEO at the American Health Care Association (AHCA), which represents 13,600 post-acute providers. In 2016, about 15,000
SNFs provided 2.3 million Medicare-covered stays to 1.6 million fee-for-service (FFS) beneficiaries, according to a March 2018
report from the Medicare Payment Advisory Commission (MedPAC).

Among Parkinson’s specific concerns was that the rule limits concurrent and group therapy to 25 percent of the patient’s total therapy time.

“Decisions about how much therapy is provided should not be made from a government office,” Parkinson said in a written statement. “Clinicians and patients should make those decisions together.”

The limit on group and concurrent therapy may impact SNF workflows and how facilities provide the therapy, said Clay Richards, president and CEO of naviHealth.

“As far as from a care management and care coordination standpoint, it’s not significant at all,” Richards said in an interview, referring to the new SNF payment model. “And it really wouldn’t change our expectations for [improved] quality outcomes.”

PDPM was meant as a simplified version of a replacement payment model for SNFs that CMS originally proposed in May 2017, known as the Resident Classification System, Version I. The new model aimed to shift Medicare payments away from volume and to incentivize providers to deemphasize therapy
hours in favor of group sessions and general quality improvements.

Another concern with the new model was that the value-based requirements could decrease SNF capacity in markets where the facilities already are in short supply, such as in much of California, said Barbara Skier RN, JD, an attorney for Stephenson, Acquisto, and Colman who focuses on hospital
payment issues.

“Yes, I want the quality but we also have to address the lack of ability to place” patients discharged from hospitals, Skier said in an interview.

MedPAC, which concluded that Medicare SNF payments nationally were “adequate,” also concluded that because it found 970 SNFs that provided relatively high-quality care at relatively low costs, “opportunities remain for other SNFs to achieve greater efficiencies.” MedPAC recommended no SNF pay
increase for either 2019 or 2020, based in part on its finding that those facilities’ marginal profit, a measure of the relative attractiveness of treating Medicare beneficiaries, was at least 19.6 percent.

“At the end of the day, providers are going to be successful based on quality outcomes and how we can evolve to—not fully away from FFS but moving toward—where providers are rewarded for producing value and better clinical outcomes,” Richards said. “I would expect that would make SNF
providers, in particular, continue to maintain that focus, recognizing there will be an adjustment in moving away from a therapy-based system to one based on clinical complexity.”

Addressing the Administrative
Burden

The PDPM approach aims to reduce paperwork compliance costs related to patient assessments by an estimated $2 billion over 10 years, CMS stated.

Additionally, CMS will remove two measures from the IRF Quality Reporting Program. Those providers can stop reporting data for the NHSN MRSA and seasonal flu vaccination measures after Oct. 1.

CMS originally proposed removing eight measures from the IPF Quality Reporting Program but ended up removing only five. It retained three measures after public comments underscored their importance.

Starting Oct. 1, 2018, the SNF value-based purchasing (VBP) program will produce payment cuts or bonuses for SNFs based on readmissions-measure performance.

“The single claims-based all cause 30-day hospital readmissions measure in the SNF VBP aims to improve individual outcomes through rewarding providers that take steps to limit the readmission of their patients to a hospital,” the CMS fact sheet noted. However, CMS will assess VBP
performance based on existing Medicare claims information instead of requiring additional reporting.

The final rule included changes in the scoring methodology for low-volume SNFs and an extraordinary-circumstances exemption policy. CMS estimated the updates will cut aggregate VBP payments by $211 million.

Another SNF change will increase from one year to two years the data collection period for calculating two measures on the Nursing Home Compare website.

HFMA RESOURCE LIBRARY

Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.

No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.

This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.

This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.

Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.

Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.

To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.

Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.

Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.

Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.

Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.

The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.

Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.

Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.

Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.

Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.

The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.

The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.

Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.

Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.

Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.

Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.

HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.

The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.

Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.

Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?

Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.

This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.

Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.

With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.

Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.